UPDATE 1-Toronto stocks inch up as Fording mulls options

TORONTO Dec 6 (Reuters) - The Toronto Stock Exchange's
main index inched higher on Thursday, lifted by takeover
speculation in the materials sector after Fording Canadian Coal
Trust FDG_u.TO said it was exploring strategic alternatives,
including a sale.

However bank stocks dragged on the market after Canadian
Imperial Bank of Commerce CM.TO said it expects more
writedowns related to the troubled U.S. subprime mortgage
market.

The TSX's cautious rise came after the Bank of England cut
interest rates in an effort to boost liquidity in markets
hobbled by the global credit crunch sparked by the U.S.
subprime meltdown.

The move by the British central bank comes on the heels of
a surprise rate cut by the Bank of Canada, and analysts said
the relatively flat Toronto market indicated investors have
buckled up ahead the U.S. Federal Reserve's rate decision next
week.

Central banks "certainly are giving us the rhetoric that
they're going to be there," said Rick Hutcheon, president and
chief operating officer at RKH Investments.

"We're consolidating yesterday's gains -- take tarts when
tarts are passed, right, and that's where we're at now."

The S&P/TSX composite index .GSPTSE was up 21.57 points,
or 0.2 percent, at 13,739.55. It jumped more than 150 points
the day before.

The market initially cheered fourth-quarter results from
CIBC, whose stock was the biggest weighted gainer minutes after
trading began. But CIBC reversed sharply and was soon the
biggest weighted loser, down C$4.65 at C$82.44 just before
midday. For details, see: [nN06206196]
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